Gov. Jan Brewer vetoes controversial ridesharing bill

PHOENIX -- Arizona Gov. Jan Brewer on Thursday vetoed legislation that
would have exempted Uber and other rideshare companies from insurance
regulations imposed on traditional taxi and livery companies.

Saying the bill does not offer fundamental safeguards that protect passengers,
she vetoed the bill just one day after the state House of Representatives gave
final approval to House Bill 2262.

"Consumer safety must not be sacrificed for the sake of innovation," Brewer
wrote in her veto letter.

Brewer took issue with several provisions of the bill, including the part that
exempts rideshare companies from the commercial insurance requirements that
require traditional taxi and livery companies to insure drivers at all times on
the job. An Uber driver who is working on the road but has not yet received a
request for a ride is not insured unless the driver's personal insurance denies
the claim, in which case Uber provides its contingent policy.

"In the larger context, this uncovered exposure likely would have led to
significant increases in insurance rates for all Arizona consumers and
unnecessary litigation," she wrote.

Uber is one of several new companies that partner people seeking rides with
freelance drivers using web-based applications. The San Francisco-based company
issued a statement expressing disappointment in the veto but vowing to press
ahead with efforts in Arizona.

"Arizonans want competition. Arizonans want choice. They lost both
tonight," the statement said. "With the veto of HB 2262, Governor Brewer has
taken an action that will slash quality jobs, restrict access to a best-in-class
transportation option and set Arizona back in the innovation economy.
Ridesharing as we know it is dead in Arizona, despite the support of tens of
thousands of residents across the state, both houses of the Legislature and a
unified industry -- a clear movement for competition and choice."

The so-called Uber bill was one of the bigger issues of contention within the
state Legislature this session. Democrats and Republicans were split within
their own parties. Proponents of the bill said government should stay out of the
way and let new companies like Uber innovate, while opponents said the lack of
regulations pose a public safety threat.

The bill would not have required Uber drivers to be drug tested, a provision
that the governor said should be in the bill when she expressed concerned over
it this week.

"Arizona employers have effectively used employee drug testing as a way to
ensure a drug free workplace," she wrote. "This is a vital tool to ensure that
passengers and other drivers on the road are protected from drivers operating
under the influence."

Lyft, another rideshare service, said they worked closely with lawmakers the bill and issued a statement, calling Brewer's veto as a "disappointing decision."

"Despite the fact that Lyft's peer-to-peer business model does not currently fall under Arizona regulations, the facts show that Lyft's safety measures far surpass those currently required by the state for other transportation providers. We worked diligently with state leaders on HB 2262, which would have provided a regulatory framework by enacting safety regulations far more strict than those currently in place for taxis and limos, including a zero-tolerance policy and drug testing program with firm exclusions and consequences, unlike other transportation providers in Arizona. This would have been in addition to Lyft's existing rigorous requirements that the company already has in place, which include background checks, vehicle inspections and commercial insurance policies.

"Today's disappointing decision goes against Arizona's commitment to innovation and entrepreneurship, but we will continue to stand strong as a community and do everything possible to ensure a path forward that allows ridesharing to thrive in Arizona. The voices of the people of Arizona deserve to be heard - they deserve more transportation choices, and they have enthusiastically welcomed Lyft to their cities for affordable, convenient and safe rides and economic opportunity."

Brewer insisted the state welcomes the rideshare industry and offers a
business-friendly environment, but said the legislation would have increased costs
for all drivers, put citizens at risk of insurance gaps, and subjected the
public to danger because Uber drivers would not be drug-tested.

The bill was sponsored by Rep. Tom Forese, R-Gilbert.
KTAR's Jeremy Foster contributed to this report.